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May 1 is probably a big day for your high school senior. Most likely it’s the deadline by which the colleges and universities in which he’s interested require him to accept their one of their admission offers. And many if not most of these institutions also require other things of him by this date. Among these:

Payment of a non-refundable enrollment deposit: If this deposit isn’t paid by May 1, he’ll lose his place in this coming fall’s entering freshman class. He may be able to get a place on his selected school’s waiting list, but there’ll be no assurance that he’ll be permitted to enroll in its fall classes.

Payment of a housing deposit: This deposit is probably non-refundable, too. Paying it by May 1 or whatever other deadline the institution has established is necessary to ensure that he’ll have a place to live in on-campus housing when he arrives at school.

Acceptance of financial aid offered by the institution: This offer will most likely be cancelled if it isn’t accepted by May 1 or, again, any later deadline your student’s Been given. And while any Federal Pell Grant or Federal Direct Student Loan that gets cancelled can be reinstated later, other aid he was offered probably cannot.

If your high school senior’s already selected the college he wants to attend, and if all the steps described above have been completed, congratulations!

But if you aren’t sure whether or how your student’s selected college is applying a May 1 deadline to him, contact the school right away to find out. And if May 1 is his deadline for anything, be sure all that needs to be done is done. Failing to do so by midnight on May 1 can really foul up college plans!

Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.comfor a free consultation if you need assistance on any aspect of financing postsecondary study.

The costs of attendance (“sticker prices”) colleges publish are not always what their students pay. In addition to federal and state awards, many schools offer their own gift aid (grants and scholarships) to discount tuition, fees, and even other expenses.

If an institution promises your prospective student a certain amount of institutional gift aid, analyze its offer carefully. It may be designed to “game” your student by discounting his initial sticker price, but then maximumize the tuition he pays in the future.

Here are some tactics to be on guard against:

Bait and Switch

Institutional aid offers may be part of sleazy bait and switch strategies that even some reputable colleges employ. The most obvious of these is loss leader awards — first-year gift aid without renewal commitments for subsequent years. But they can be part of more subtle and sophisticated schemes, too. For more about the latter, see “Before College: Beware of Bait and Switch.”

Wait and See

Be careful if an institutional representative suggests your student pay expensive and non-refundable enrollment deposits now, then hold on to find out if more grant or scholarship funding can be freed up for him later. Your student may or may not get additional gift aid — absent a written commitment, there’s no assurance of it — or the added aid may not match his needs or expectations.

Curbing Comparative Shopping

Thousands of postsecondary schools reportedly provide the Financial Aid Shopping Sheet with their financial aid offers. This document lays out sticker prices and financial aid awards in a common format, making it easy to do a side-by-side comparison of the net first-year prices your student will face at various colleges.

The Shopping Sheet also divulges the median amount borrowed by a college’s graduates, plus graduation and student loan default rates for its undergraduates — the last two being relative measures of institutional quality.

Unfortunately, the Shopping Sheet is voluntary. Some schools don’t provide it, making it difficult to measure them against their competitors. Before your student pays an expensive enrollment deposit to such a school, ask why it isn’t revealing it’s comparative data. In short — what is the school trying to hide?

Even colleges making honest and straightforward aid offers can be expensive. So help your student avoid falling prey to the games some schools play with aid offers so his higher education will be as affordable as possible.

College Affordability Solutions has 40 years experience with strategies that help make education beyond high school more affordable. For a no-charge consultation about such strategies, call (512) 366-5354 or email collegeafford@gmail.com.

In November College Affordability Solutions urged you contact your members of the U.S. House and Senate in opposition to certain provisions within the House tax bill that was then working its way through Congress.

That bill was supposedly designed to cut taxes. But it would have done away with deductions and exemptions that reduce taxes for you and other students and parents by over $18 billion a year — money that helps pay college costs.

The original House bill was remarkably partisan. It was written by Republican House members without input from Democrats, and it got 227 Republican votes but no Democratic votes

Fortunately, the Senate also opposed eliminating college-related tax deductions, exclusions, and exemptions. It made sure they remained unchanged in the final bill, which is now law. So don’t ever think your voice doesn’t matter — constituent pressure clearly helped preserve these tax breaks!

Here are the college tax benefits that were preserved in the final bill:

If you’re a student, you still won’t be taxed on money you use from your College Savings Bonds to pay your educational expenses.

Parents, you may keep on making deposits into your Coverdell Education SavingAccounts to build up money for college.

The first $5,250 you use from your Employer-Provided Educational Assistance program to pay higher education costs will continue to be untaxed.

The Lifetime Learning Tax Credit remains unchanged. So you may keep reducing what you’ll pay in federal income taxes by up to $2,000 a year based on what you spend on tuition, required fees, books, and supplies for any student (including you) taking courses to get a degree or improve job skills.

The Scholarship and Fellowship Exclusion will continue to omit from federal taxation what your scholarships and fellowships pay toward your college costs.

Borrowers, you’ll still be able to claim your Student Loan Interest Deduction of up to $2,500 for student and/or parent loan interest you pay each year.

Your $4,000 per year Tuition and Fee Deduction remains unchanged.

Are you or will you be a graduate student? If so, any Tuition Reduction you receive in connection with a graduate assistantship or fellowship still won’t be subject to taxation.

Congratulations on keeping these benefits! But stay active and alert. More bills impacting college affordability will come before Congress soon.

The U.S. House of Representatives recently passed its tax bill. This bill would repeal many of the higher education tax benefits on which millions of college students and parents rely. But it isn’t law yet.

The U.S. Senate will soon act on a similar bill. But as currently written, the Senate’s bill would keep the House-targeted college tax benefits in place and unchanged. These benefits include:

College Savings Bonds: The House would start taxing students on money they use from such bonds to pay college expenses.

Coverdell Education Saving Accounts: The House would prohibit new deposits into these accounts.

Death and Disability Debt Discharge: The House would tax student loan debts forgiven for borrowers who die or suffer total and permanent disabilities.

Employer-Provided Educational Assistance: The House would subject what your employer spends on your tuition, fees, books, and supplies to taxation The Senate would leave current law as is — so only employer spending above $5,250 would be taxed.

Graduate Tuition Reduction Exclusion: The House would make all tuition reductions awarded to graduate research and teaching assistants taxable income.

Interest Deduction on Student Loans: The House would end this $2,500 per year deduction.

Lifetime Learning and American Opportunity Tax Credits: The House would repeal the Lifetime Learning credit that applies to what you pay on a course helping you get a degree or a job skill. Instead, it would expand the American Opportunity credit from 4 to 5 years. But the American Opportunity credit applies only to degree-related courses. The Senate would leave both credits unchanged.

Tuition and Fee Deduction: The House would kill this $4,000 per year deduction for what you pay in tuition and fees for yourself, your spouse, and your dependents.

All these changes would take affect in 2018 unless the Senate causes them to be dropped.

The Senate will amend, debate, and vote on its bill soon after Thanksgiving, so there’s little time to contact your Senators (their contact information is here). Urge them to use the Senate bill to preserve the tax benefits described above.

The House and Senate must negotiate to finalize all differences in the bills they pass, and such negotiations often lead to one or the other bill’s differences being dropped. So the last, best hope for preserving these tax benefits is a Senate tax bill that opposes the House’s plan to kill them.

Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com if you have questions.

The Ways and Means Committee of the U.S. House of Representatives is finalizing HR 1 and the full House will soon vote on it. It’s called the “Tax Cut and Jobs Act,” but as currently written this bill would eliminate federal tax breaks now available to you if you’re a current, former, or future college parent or student.

But HR 1 hasn’t become law yet. You can still influence it by telling your Representative you want these tax breaks left intact. So find your Congressperson’s contact information here and call or write immediately!

The higher education tax breaks you’ll lose if HR 1 becomes law as currently written include:

Tuition and Fee Deduction: HR 1 would end your right to deduct up to $4,000 per year for what you pay in postsecondary tuition and fees.

Scholarship and Fellowship Exclusion: Under HR 1 the government would tax scholarship and fellowship amounts that pay for your tuition, fees, books, and class supplies.

Lifetime Learning and American Opportunity Tax Credits: HR 1 would eliminate the Lifetime Learning Tax Credit. For an unlimited number of years, this credit allows you to reduce your federal income taxes by up to $2,000 per student for what you pay toward tuition, required fees, books, and supplies for courses leading to a degree or to acquiring or improving job skills. To partially offset this loss, the American Opportunity Tax Credit of up to $2,500 per student would be expanded to cover five, instead of four years of these expenses — but only for at least a half-time degree or certificate-seeking student.

Student Loan Interest Deduction: HR 1 would end your tax deduction of up to $2,500 per year on student and parent loan interest you pay.

Employer-Provided Educational Assistance: Today the first $5,250 your employer pays on tuition, fees, books, and supplies for courses you take is excluded from what determines your federal income taxes. HR 1 would end this, and you’ll be taxed on such assistance.

Coverdell Education Savings Accounts: HR 1 would make 2017 the last year to make new deposits into Coverdell accounts.

College Savings Bonds: HR 1 would tax students on money they use from federal college savings bonds to pay for college.

The House votes on HR 1 soon. So if these or any of its other provisions would affect you, hurry up and exercise your rights as a citizen!

Your College Finance Plan (CFP) needs strategies for you and you student to implement before, during, and after college. Let’s look at the “During College” phase.

Research at a major university indicates that, looking back, almost 4 out of every 10 seniors conclude part or all of their student loans weren’t essential for their educations. Therefore, some of these strategies focus on personal money management so students can spend and borrow less of the interest-bearing educational debt that, over time, increases college costs. These include:

Spending Plan: You know mapping out income and expenses is critical to staying financially fit. But mentor your student on doing a “spending plan,” not a “budget.” To many, budget is like diet — a dirty word.

Educational Tax Benefits: These can help you and your student reduce federal income taxes. The savings can be plowed back into funding his education and lessening his need to borrow.

Also, the faster your student gets her degree, the less cost and debt she’ll incur. Still, the latest national data show that only 39.8% of undergraduates earn their bachelor’s degrees within 4 years. Here are some strategies that’ll help your student graduate on-time, if not before:

Keep Applying for Grants and Scholarships: Complete the FAFSA every year and never stop pursuing scholarships. More grants and scholarships can help your student borrow less and speed her time-to-degree by funding a heavier course load.

Work Part-Time While Enrolled: By working, even during her first year, your student can earn a higher GPA and reduce her chances of dropping out, provided she does not work too much. And her earnings can help limit her borrowing.

Look here for why you need a CFP. You can find summaries of strategies for your plan’s “Before College” phase here. And next Wednesday there’ll be samples of “After College” strategies for your CFP here.
Beginning October 16, check this website every Wednesday for a more detailed account of a strategy you may want to use in your CFP’s before, during, or after college phase.

About 4 million babies will be born in the U.S. this year. Naturally, their parents want each of them to enjoy the American dream. Now, more than ever, that dream includes, even depends on a good education beyond high school.

But the dream is unraveling. It’s coming undone as the rising cost of college outpaces all but the wealthiest families’ ability to pay for it.

In 1998, the total cost of a year at a state college or university averaged $10,458. That was 27% of U.S. median household income. Eighteen years later this cost was $24,610, or 42% of median household income. At this rate, freshman year public college expenses for 2017’s newborns will average $33,224 — an astounding 56% of median household income.

Small wonder educational debt for recent college graduates averaged $34,000, or that 44 million Americans owe $1.4 trillion in such debt. Nor is it surprising that, in 2015, there were a million fewer students in college than in 2010; the first ever 5-year drop in our nation’s college enrollment.

How to ensure your child can afford college when he or she is ready to attend? It won’t be simple, and it won’t be easy. But a College Finance Plan (CFP) can help.

A CFP is like a mortgage — a decades-long undertaking. You (the parent) and your student (son or daughter) are its key players. It involves nothing exotic or fancy; just strategies to be adopted before, during, and after actual college enrollment. You’ll want to start implementing these strategies as early as you can, and stick to them.

A CFP won’t make college free, or even inexpensive. But collectively, its strategies can help make college costs more manageable so your student can access the best possible postsecondary education.

Want a quick look at strategies you should consider for the “Before College” phase? See Before College: Strategies for Your College Finance Plan. A review of “During College” strategies will be posted on this website October 2, and “After College” strategies will be outlined here October 9. You’ll also find more in-depth discussions of individual strategies here through the end of academic year 2017-18.

No matter where you and your student are in the college-going process, itake concrete steps to keep the cost of a postsecondary degree within your means. Start building your CFP now!

Got questions about college costs and how to deal with them? Contact College Affordability Solutions at (512) 366-5354 or collegeafford@gmail.com for help at no charge.